Interested in why is it folly to believe any predictions made about trade wars will be right in the future, based on past history?
I decided to re-post this post because of today;s news about President Trump’s 60 billion dollars of tariffs . We all will soon be inundated with frantic warnings by news pundits calling it folly to impose tariffs even though the present trade deficit with China is estimated to be between 360 to 500 billion trade difference as a result of Clinton’s foolish trade agreements with China, in my opinion.
The Chicago Tribune article titled,will There is No Right Side of History, explains how they (projection of the future based on history) do not move in tandem.
“At any period in our lives, even modest predictions about the future are very unreliable. “
“There is no teleology, no “right side of history.” We make the world we want to live in, and we have a responsibility to do that work.”
How do these statements compare to the wisdom of King Solomon is in part, the subject of this post. This post contains philosophy of Bill Buckley, Bastiat, and all the present critics of President Trump who are now predicting gloom and doom about a trade war.
Also to explain my opinion of what’s behind Trump’s statement, ‘trade wars are good.’
Because no one knows what will happen, and no one can say when something might happen. (Ecclesiastes 8:7)
Do not say, “Why were the old days better than these?”
For it is not wise to ask such questions. (Ecclesiastes 7:10}
What’s My Point?
If there is to be a trade war, the country that is the most self-sufficient will over time fare better than a country that is not. The USA, now that it has reasonable means to produce oil is no longer dependent on the Middle East.
The USA has the best resources available to feed, cloth , or provide energy for itself.
Any technology in the form of machinery or equipment that produces any imported products can be produce and duplicated in the USA in time.
All the jobs presently in the USA connected to producing exports over time can be transferred to jobs to produce the same products presently being imported into the USA.
Most people do not understand the detrimental effects of unbalanced trade in my opinion.
The fact that the USA balance of payments is severely out of balance, something needs to be done to balance trade or in time everyone in the USA and all businesses and property will be owned by citizens of other nations.
If you do not understand this statement, I recommend you read this explanation given by Warren Buffet in the Source Links below.
Understands how unbalanced trade has resulted in the loss of manufacturing jobs, the resultant reduction of the middle class living standards, and the damage of a stagnant USA economy caused by outsourcing and dependency on imports.
In other words, Obama’s economists about a Service Economy was is a total failure.
The countries that are obtaining huge favorable trade balances have fared better than the USA based on the huge differences of modern equipment and infrastructures in their countries compared to the USA.
What Trump is doing is the same successful trade strategy that China used. That is if you want to sell your products in the China market, you must invest and build plants and equipment in China so their laborers are employed, earn money, pay taxes, and improve their standards of living,
He also knows that USA workers that have to pay $800 a month rent will never be able to compete on price alone with nations that pay their workers only $200 a month in wages because they live in a country with lower costs of living than the USA.
To prevent a trade war, all present trade partners of the USA have to do is invest to build plants in the USA and employ USA labor to make a portion of their products and services in order to balance the present huge trade imbalances .
If they want to engage in a trade war, they should consider who will be the winners or losers over time.
Will USA products cost more? Yes, but compare the cost of an imported product that is purchased once ever three of four years to the costs paid in higher taxes to support USA unemployed workers, provide food stamps, social services, rent subsidies, etc.
In other words, someimes the cheapest price is not the best value for our nation.
Also, if product costs are amortized between foreign labor and US labor, the price differences of products will not be as exorbitant as the doom and gloom economists will expound.
In My Opinion
President Trump knows how to negotiate trade agreements better than Clinton , Bushes, or Obama.. If you don’t believe this or understand this, check into the charts that tracked deficits trade balances of the USA grew after the NAFTA, China, and South Korean trade agreements were implemented.
Then check into how many nations have been buying up USA business, farmland, and properties with the dollars they accumulated from trade balances.
Then read again what Warren Buffet proposed back in 2003
As for the right side of history statements of Bill Buckley, the Wisdom of King Solomon, think about how the American Indians fared over time after they sold Manhattan Island for wampum. (USA dollars)
In my opinion, now is the right time to re balance trade for both the sake of our nation and the future of our children and grandchildren if we don’t want to wind up like the American Indians did or become a third world nation supping the wealth of our nations resourcesand working for owners living in other nations.
Instead, as USA workers earn livable wages, they can invest in the Corporations and share in the profits rather than all the profits in the form of dollars going to other nations to continue to modernize their manufacturing skills expertise technology and infrastructures.
We need the dollars to be spent in the USA to grow the USA economy instead of being accumulated and spent to buy USA assets or used to grow other nations economy and standards of living.
In other words, free trade is good if it is balanced and reciprocal. Otherwise, if you were affected when your job was outsourced, you know better what happened better than the economists and politicians screaming out gloom and doom about the future based on what happened in the past.
Who is Right?
Bill Buckley was right, “there is no right side of history.”
King Solomon was right, “no one knows what will happen.”
President Trump is right, if countries do not want to buy USA goods reciprocally to balance trade, or renegotiate unfair trade agreements, that based on the present natural resources and technology of the USA, and the spirit of freedom and independence of Americans, “trade wars are good,”
When, if ever, will be the right side, when we are on the losing side of unbalanced trade in huge amounts of one half trillion dollars a year, year after year, after year?
Do you remember when the 1983 NAFTA trade agreement was in the news, the statement that “you will hear the roar of USA jobs will be sucked out.” or “consider these statements, if we have to go to war now, are we going to ask China to make us some tanks?” or, “ some steel to make tanks?”
Who do you trust more to solve the present trade imbalance problem of the USA? Will it be the bias news media , the wrong economists and politicians funded by special interests who helped negotiate the present foolish trade agreements, or President Trump?
Do you remember the reason for the Boston Tea Party was all about? Will the USA in time get fed up working to profit themselves rather than foreign entities?
Regards and goodwill blogging.
(Original post 3/10/2018)